Technology Group grows China sales by more than 1 billion CNY in 2017

Freudenberg posts another year of sustainable growth through ground-breaking innovations and future-oriented portfolio management

Beijing, May 24, 2018. The worldwide technology group Freudenberg has continued its good business development despite challenging economic conditions. In 2017, the global technology group with German roots boosted sales to €9.3 billion or CNY 71,547 million. That constitutes a rise of 18.3 percent over the previous year. The future-oriented nature of the Group is evident from the fact that about one third of sales is earned with products introduced less than four years ago. Freudenberg’s business in Greater China also performed strongly, with sales growing by some 15% to CNY 8.3 billion. The rise in sales is the result of continuous investments in existing and new projects, the market success of the Group’s innovative products in China and its contribution to China’s sustainability targets.

“Both operationally and strategically, 2017 was a successful year for Freudenberg,” said Dr. Mohsen Sohi, CEO of the Freudenberg Group, at the press conference in Beijing. “We are well on our way to being one of the most innovative and efficient technology companies.” The Group aims to further balance its portfolio towards generating one-third of sales each in Asia, the Americas and Europe. “The Chinese market plays a key role in our existing and future operations, and our diversified and innovative portfolio caters to the demands of China’s industry, while at the same time supporting the goals of the current Five-Year Plan.” Freudenberg has been supporting Chinese customers for more than 100 years.

In China, Freudenberg’s more than 70 sites generated sales of 8.3 billion CNY in 2017, an improvement of more than 1 billion CNY or some 15 percent over the previous year. More than 6,600 employees now work for the Group in China, including at 23 production sites. More than half of these locations have their own onsite R&D. “Local R&D is becoming increasingly important. We have recognized that and spent close to CNY 200 million on R&D in China alone last year,” said Bettina Schoen-Behanzin, Freudenberg Regional Representative Asia.

Beyond R&D expenses, Freudenberg invested CNY 232 million in China in 2017. “In addition to expanding several production plants, the investments also went into technology centers and local R&D facilities,” Schoen-Behanzin added.

Innovation is the key to Freudenberg’s long-term corporate success. During the year under review, the Group invested more than ever before in innovation and conducted research and development activities in the amount of 3,275 million CNY (previous year: 2,733 million CNY, +27.6 percent). This corresponds to 4.6 percent of sales (previous year: 4.2 percent). The objective of all activities is to further increase the share of new products in sales.

During the year under review, an average of 3,445 employees (previous year: 2,751 employees) were employed in research and development.

For Freudenberg, striving together for solutions that support global sustainability is part of its mission to improve living conditions all over the world. The Group’s sustainability strategy is based on six core themes. They are materials, waste, energy, emissions, water and health.
“Each of these themes is also addressed in one form or another in China’s 13th Five-Year Plan,” Schoen-Behanzin said. “Our solutions are already used in many Chinese industries and we continue to support our local partners with innovative and sustainable products and processes.”

Examples of Freudenberg’s contributions to sustainability in China
Freudenberg’s sustainable solutions for the food and apparel industries are essential to the daily lives of tens of millions of Chinese. High-performance specialty lubricants from Klueber China, a Freudenberg Chemical Specialities company, ensure the safe production of condiments and dairy products, while simultaneously lowering energy consumption and CO2emissions.

Freudenberg’s solutions also contribute to making China’s logistics industry more sustainable. Every day, more than 13 million trucks drive on China’s roads, one of the busiest logistics hubs in the world. The innovative Axial Cassette Seals from NOK-Freudenberg China can save up to 150 liters of Diesel per 200,000 kilometers traveled for one heavy duty truck. They therefore help lower CO2 emissions, thereby improving air quality. The unique design of this seal helps reduce engine oil changes by 80-90% during their lifetime. Another long-life cassette seal also helps extend the service life of the truck axle by 5-10 times.

Environmentally-friendly Freudenberg solutions also support rising consumer demand for sustainability in the apparel segment. Already today, 90% of the interlining products from Freudenberg Performance Materials do not rely on perfluorinated and polyfluorinated chemicals (PFC). The company is committed fully phasing out the use of PFCs, which are harmful to the environment, by 2020. In addition, Freudenberg Performance Materials is using recycled PES material to produce interlinings for the Asian market at great success: Sales of related products have doubled over the last three years.

Responsibility for society and Corporate Citizenship
As a values-oriented, family-owned technology group, success for Freudenberg is not merely defined in terms of financial success, but also always goes hand-in-hand with taking responsibility for society. These two goals have been inseparably linked since the foundation of the company. Sustainability, Occupational health, safety and environmental protection (HSE), Corporate Citizenship, Compliance, Human Rights & Labor are anchored in Freudenberg’s values and principles.

For Freudenberg, commitment to Corporate Citizenship goes beyond the value chain. In addition to a number of measures, the objective of the “e2” (education and environment) international program is to give people access to education and work and to encourage environmental protection. Freudenberg is currently making a total of 107 million CNY available over 7 years. From the launch of the initiative in the summer of 2015 up to the end of 2017, funding was approved for a total of 60 projects, from small actions to major education programs in the direct neighborhood of Freudenberg sites.

Beyond “e2”, Freudenberg’s social commitment to China is embodied by its “Love Beyond Donation” campaign, which dates back to shortly after the Sichuan earthquake in 2008. In the wake of the disaster, Freudenberg invested in rebuilding the Ke De Bao Primary School. The school was one of the first to be reconstructed through donations and private initiatives. Since its reopening, Freudenberg employees have been organizing the “Love Beyond Donation” campaign to teach and financially support students for example through private sponsorships. The overall aim is to provide a good education to elementary school children in a rural setting and to care for children from disadvantaged families. To date, more than 500 Freudenberg employees and partners have participated in the project.